Assessing Materiality And Risk Simulation

GASB and FASB Analysis Paper

GASB:

The mission of the Governmental Accounting Standards Board is to establish and improve standards of state and local governmental accounting and financial reporting that will result in useful information for users of financial reports and guide and educate the public, including issuers, auditors, and users of those financial reports. Source: http://www.gasb.org/

FASB:

The mission of the Financial Accounting Standards Board is to establish and improve standards of financial accounting and reporting for the guidance and education of the public, including issuers, auditors, and users of financial information. Source: http://www.fasb.org/

Similarities & Differences:

Both boards share the following objectives:

1. To be objective in its decision making and to ensure, insofar as possible, the neutrality of information resulting from its standards.

2. To weigh carefully the views of its constituents in developing concepts and standards.

3. To promulgate standards only when the expected benefits exceed the perceived costs.

4. To bring about needed changes in ways that minimizes disruption to the continuity of reporting practice.

5. To review the effects of past decisions and interpret, amend or replace standards in a timely fashion when such action is indicated.

The main difference between the two is that the GASB is specific to individual state legislatures and the FASB is on a federal level, so their scope is much broader.

Describe how the modified accrual basis of accounting differs from the full accrual accounting. The following information was found in out text book as referenced at the end of my discussion

A full accrual accounting system may be needed for an agency that delivers services or has commercial activities, while for other agencies a cash-based system and